Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Which of the following examples can be classified as an accounts receivable?

Interest receivable on a loan

Amounts owed by customers for goods sold on credit

Advances made to employees

A written promise from a customer to pay a fixed amount on a future date

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Verified step by step guidance

Step 1: Understand the concept of accounts receivable. Accounts receivable refers to amounts owed to a business by its customers for goods or services provided on credit. It represents a claim for payment and is recorded as an asset on the balance sheet.

Step 2: Analyze each option provided in the problem. Determine whether each example fits the definition of accounts receivable, which specifically involves amounts owed by customers for goods or services sold on credit.

Step 3: Evaluate 'Interest receivable on a loan.' This represents interest income that is owed to the business, but it is not related to goods or services sold on credit. Therefore, it does not qualify as accounts receivable.

Step 4: Evaluate 'Advances made to employees.' This represents amounts paid to employees in advance, which is a receivable but not related to goods or services sold on credit. Hence, it does not qualify as accounts receivable.

Step 5: Evaluate 'A written promise from a customer to pay a fixed amount on a future date.' This is a promissory note and is classified as notes receivable, not accounts receivable. The correct example of accounts receivable is 'Amounts owed by customers for goods sold on credit,' as it directly fits the definition.